Tag Archives: warren

EP17 Capital Allocation Policy (Reinvesting, Dividends, vs. Share-repurchases)



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This episode covers how management’s decision on capital allocation policy can greatly affect the value of your investment in the long term.  Earnings/capital can be allocated in various ways. Warren Buffet mentioned in his shareholder letters as to when it makes sense to use one option vs. the other.  Later, I discuss how you can get a hint of whether the management team acts in the best interest of long-term shareholders.

The following capital allocation options are discussed in this episode.

  • Reinvested back into the business to maintain the current operation
  • Reinvested back into the business to grow the business
  • Used to acquire other businesses via M&A deals
  • Parked and invested in marketable securities such as Treasury Bills
  • Distributed to shareholders in the form of dividends
  • Distributed to shareholders through share-repurchase program

Podcast website: http://valueinvesting.blubrry.net/


EP16 (Part 2) Business Intrinsic Value Calculation



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Followed by EP15 that covered three main valuation approaches (ratio-based, asset-based, and acquisition-based), this episode covers a Discount Cash Flow (DCF) approach to derive an intrinsic value of a company.  In this episode, I discuss three important questions for the DCF approach and show you how you can estimate the intrinsic value by using a 2-stage DCF analysis.

  1. Estimate the first year normalized future cash flow after excluding unexpected items
  2. Determine the first stage growth rate depending on the characteristics of the business
  3. Calculate a terminal value by assuming that the company is mature
  4. Use an appropriate discount rate (either 30 yr Treasury bond rate or other approaches such as WACC)

Additionally, I cover how you can include conservatism as a value investor in three different places (cash flow projection, discount rate, and margin of safety).

DCF tool available on: https://www.gurufocus.com/

 


EP15 (Part 1) Business Intrinsic Value Calculation



Support this podcast through your donation: https://paypal.me/valueinvesting

This episode and next episode cover four valuation approaches to derive an intrinsic value of a company.

  1. Ratio-based approach (covered in this episode)
  2. Asset-based approach (covered in this episode)
  3. Acquisition approach (covered in this episode)
  4. Discounted Cash Flow approach (covered in the next episode)

Podcast Website: http://valueinvesting.blubrry.net/


EP14 Why Long-term Investing Works and Is Not So Easy



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This episode covers seven benefits (four explicit and three implicit benefits) with respect to long-term investing.  Additionally, I do a deep-dive analysis on why most people fail to do the long-term investing despite many benefits, and finally discuss what you can do for your portfolio.

Podcast Website: http://valueinvesting.blubrry.net/